Region Could Lose $1 Billion In Sandy Aid As Fed Spends On Other Disasters

New York City, New York State and New Jersey may have to compete for more than $1 billion in promised Superstorm Sandy relief that the federal government is now looking to redirect to victims of other natural disasters.

The United States Department of Housing and Urban Development (HUD) is considering sending off $1 billion of an as-yet unspent $3.5 billion in Sandy relief funds to other parts of the country that are dealing with their own natural disasters. This decision could leave New York City short of funds at a time when there is a renewed effort by local politicians to pick up the pace on programs like Build it Back, potentially throttling the program just as it’s poised to hit its stride.

When Superstorm Sandy hit, Congress set aside about $60 billion in 2013 for Sandy aid. More than $15 billion went to HUD for distribution on the local level to help relief efforts and get people back in their homes. Since then, about $10.5 billion has been spent, leaving $3.6 billion still available, according to The Wall Street Journal.

The Journal reports:

HUD officials recently briefed members of Congress on a proposal that would create a national resiliency competition to more widely distribute about $1 billion to $2 billion of the remaining Sandy aid to areas that have recently suffered disasters. It would be the first time HUD held a national competition for federal disaster money. The contest would reward projects that make communities more resilient against future disasters, according to people familiar with the plans.

Senator Charles Schumer said yesterday that he will fight any attempt to take money away from the region’s aid relief.

“We will fight to ensure that every one of New York’s needs are met before a national competition sends a single Sandy relief dollar elsewhere,” Schumer said via Bloomberg News.

And Schumer isn’t the only one who said that he will fight this possibility. Bloomberg News writes:

Representative Michael Grimm, a New York Republican whose district includes Staten Island and parts of Brooklyn, has been in “constant contact” with Donovan [the Secretary of HUD]to stress his district’s needs, said Nick Iacono, a spokesman for the lawmaker.

Grimm and other Congressional representatives sent a letter yesterday to HUD’s Secretary Shaun Donovan asking for more information about the proposed reallocation, The Journal reported yesterday.

The letter to U.S. Department of Housing and Urban Development Secretary Shaun Donovan was signed by 13 members of the House of Representatives. They expressed “concern with the lack of consultation and briefing between HUD and members of the House and their staff on this issue.”

The announcement comes at a time when city officials are paying renewed attention to relief efforts. Initiatives like the Build it Back program, which had been in a lull until recently, have become the center of attention. The program is partially funded by HUD money and New York City Mayor Bill de Blasio has recently announced intentions to repair the homes of all those who qualify, rather than just the financially neediest applicants – greatly increasing the estimated cost of the program.

The Journal reports:

In the city, Mayor Bill de Blasio’s administration has set an ambitious goal of getting 500 Sandy-damaged homes rebuilt by the end of the summer; currently only nine homes have started construction. City officials have said they need $1 billion in additional federal money for the Sandy recovery, and even more to complete a city resiliency plan.

“We’re working closely with HUD and our federal partners to ensure that we have the resources to fully recover and rebuild. It’s vital that funds get to the NYC homeowners and public housing residents who need them,” a city spokeswoman said in an email.

De Blasio has criticized HUD’s decision. “The legislation was passed to serve the needs of people in New York and New Jersey who were devastated by Sandy. And it was about both getting people back on their feet and providing the resiliency we need for the future,” de Blasio said via the Daily News.

The feds, however, expressed puzzlement at the reaction, saying that the bill authorizing the $60 billion aide package explicitly stated that a portion of the funds could be redirected to other disaster zones, and that the Sandy region should never have relied so heavily on the third and final round of funding. The Journal notes:

Federal officials said the city and states have overestimated their remaining needs. They said local representatives shouldn’t have expected the third round of funding to provide a significant infusion of new funds based on how the $60 billion Hurricane Sandy Relief Bill passed in 2013 was written.

In the three years covered by the Sandy aid bill, 208 major disasters have been declared by the federal government. A person familiar with the proposal said 48 states would be eligible for the national competition, along with Puerto Rico, District of Columbia and 18 other areas including New York City and Joplin, Mo., which was hit by a tornado in May 2011.

A portion of the third round of funding would also likely go to Rebuild by Design, a regional resiliency competition that HUD launched with much fanfare. Secretary Shaun Donovan, a former New York City Department of Housing Preservation and Development commissioner, is said to have been inspired by his work under Mayor Michael Bloomberg, who had a propensity for holding competitions to generate excitement around government work.